What’s the first thing that comes to mind when you think “traveling” and “dynamic pricing”? Anyone who has used the Internet to book travel trips before and has knowledge of the vast amount of sites out there would still think of only one: Priceline.
Priceline embodies the concept of dynamic pricing, and has built their entire company off of it. In this age where there are about eleventy-billion travel sites out there, with big names like Expedia, Priceline had to do something to set it apart. I’ve never personally used the site, but it’s basically works on a “name-your-own-price” basis. The company has deals with certain airlines that allows them to give incredibly cheap flights for customers.
While I think this is a great concept to build off of, it seems like a method most suitable only for those travelers who are very flexible. If you aren’t flexible, and have specific days / times or any other preferences in your traveling, Priceline’s prices seem to be no different than any others. And by flexible, it means you’re willing to fly at odd hours, end up on the RedEye flight, arrive on a different day as planned, etc. According to one traveler, by giving Priceline your “flexibility”, you’re taking a bunch of risks with your trip, and the details aren’t confirmed until after your credit card has been charged.
While I think this is a great idea, I honestly don’t really know how effective it is. I bid on a couple different flights, both domestic and international, and while it gave me the price I bid at, which was considerably lower than what the price of the flight should have been, the total price ended up skyrocketing with taxes and fees, not to mention the $24.95 charge they tacked on for the delivery of the ticket to my mailbox. (Have they not caught on to the e-ticket phenomenon?)
Priceline has been a rather “small player” in the home market, but has been expanding considerably in both Europe and Asia. As of right now, I think they’re being held back in our market mainly because most of the travel sites are using dynamic pricing as well. While they don’t allow you to specifically name your price, they still search for the cheapest flights when you put in your specifications, and offer you options galore. The entire online travel industry kind of operates on the dynamic pricing concept. This is why we can get flights cheaper far in advance, and also manage to get them cheap the day of, because the companies adjust their prices according to their demand and supply of seats. Because they have to pay to put that plane in the air anyway, they want to fill those seats, and because of the immediacy of the Internet, they can afford to continuously change their prices to do so.
All in all, while Priceline takes dynamic pricing to an even higher level, I believe the entire industry is practicing this concept anyway, and thrives off of it. Even while Priceline has taken steps to set itself even further apart, such as the “no booking fees” policy they’ve recently introduced, they still may not be making the cut.
(But, then again, even William Shatner advocates using Priceline. To quote him, “You know my nemesis. He goes by the name of Full Price”. haha)
Tags: dynamic pricing, Travel
